Finessing A Recession!

Question: What is the difference between a recession and a depression?

Answer: In a recession, I have a job and you don’t. During a depression, you are gainfully employed and I’m pounding the pavement (or web) for work.

For most of us, it is as good an answer as the one provided by the National Bureau of Economic Research:
“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.”

Thank you Wikipedia.

Here are some things to consider about creatively finessing the “Big R” from someone who has experienced and survived uncertain and difficult financial times and lived to write about it:

Realize that all economic down turns eventually bottom out and things get better.

History suggests that most down economic cycles take anywhere from two to seven years to run their course. Ironically, it is at the point of maximum pessimism where the real opportunities are often found.

When you start to hear everyone blabbing about the “greener pastures/heavens on earth” that are to be found in Tennessee, North Carolina, North Georgia, and Las Vegas, it might be the time to both roll your eyes and take out your checkbook.

Start researching local real estate opportunities, broad-based stock indexes and mutual funds, and the possibility of starting a creative business; you can enjoy warm winters and rent cheap studio or office space.

The trick is to have cash or a secure line of credit during a major downturn or panic. But it takes nerve and a basic optimism about the future.

Had I invested in Portland (Oregon) in 1974, Berkeley (CA) in 1975, or NYC in 1979, I’d be a very rich man today.

But at the time, I could not see beyond my current circumstances as a struggling young artist and designer; or really believe that things could change for the better. It was a story of wasted opportunities.

Fortunately, I did buy in St. Pete in 2004. Not at the top or the bottom of the real estate curve.

If you can entertain a 10- to 12-year timeframe, there is more than a reasonable chance that the creative economy will prosper in the Tampa Bay. That is why Amy and I are not planning on selling and moving on when things eventually improve in the real estate market.

Understand and accept the three basic realities of life as a creative worker or entrepreneur in a free market economy:

1. When the mainstream economy catches cold, advertising, architecture, publishing, journalism, public relations, and cultural institutions and organizations tend to get triple pneumonia.
2. Even during hard times, most people are still working. (Think educators and administrators, police and fire fighters, healthcare workers from doctors to janitors, civil servants, members of the armed forces, etc.)
3. Many professionals are likely to prosper no matter what happens. This includes upscale surgeons and psychiatrists, bankruptcy lawyers and business turn-around specialists, astute financial speculators who know a bargain when they see one, financial planners to the worried-but-well-off, and of course, sympathetic bar tenders and smiling waiters who cater to both the haves and have-nots.

You are not your job description or resume. Perhaps the most insidious aspect of a severe recession is the assault and insult to our sense of self-worth. If one’s creative services or artifacts are not required in the marketplace at a particular moment, we might take it very personally. Too personally, in fact.

Fortunately, we can always be good parents, friends, and relatives no matter what the masters-of-the-universe on Wall Street, at the Federal Reserve Bank and, increasingly, in corridors of power in China and Saudi Arabia are cooking up for the world economy.

I suppose it boils down to not putting all one’s emotional eggs in the same basket. The role of chance and randomness in human existence suggests that having a strong and variegated social network is the only financial security that is available to most us.

Lighten up about your personal plans and goals in an increasingly complex, computerized, and unpredictable global economy.

As Americans, we are heirs to the hard and harsh ethos of Puritan, frontier, and immigrant cultures. It is not easy for many of us to even momentarily relax our guard. So I am concluding with one of my favorite jokes:

One day out of the blue, God tells all the world’s senior TV executives that the earth is going to end in a great global tidal wave that will drown every living person in just 59 minutes.

There is absolutely no time to build any arks this time around.

When British citizens hear this dire message from a legitimate news sources, they quietly get dressed in their best clothes, form straight lines in front of Buckingham Palace, stand at attention with a stiff upper lips, and calmly prepare for their eminent demise.

The French, upon learning of their terrible fate, hop into bed with their lovers for one last amorous embrace.

When Americans learn of the impending disaster, they drive off to to buy snorkels and scuba gear!

In post-Katrina America, this joke is not quite as funny as it once was. But fortunately, we are still a nation of pragmatic and creative problem-solvers, not slackers.

For more comic relief, enjoy this parody by Columbia Business School’s Dean Glenn Hubbard and students about wanting Alan Greenspan’s job, which went instead to New Fed Chair Ben Bernanke.